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Economy | Make in Nigeria

A MoM Improvement in the Trade Surplus in February 2022

Jul 26, 2022   •   by   •   Source: FBNQuest   •   eye-icon 283 views

The CBN's latest monthly Economic Report shows that the provisional value of Nigeria’s total trade increased by c.4% month-on-month (m/m) and 38% year-on-year (y/y) to USD9.3bn in February ’22. We see from the report that the value of total merchandise exports increased by 7% m/m to USD5.2bn. In contrast, total imports decreased marginally by less than -1% m/m to almost USD4.1bn. However, on a y/y basis, the value of total merchandise exports and imports grew by 24% y/y and 62% y/y respectively. The external trade position implies a 49% m/m increase in the total trade surplus to USD1.2bn. 

Crude oil and gas exports increased by 9% m/m to  c.USD4.7bn, or c.89% of total exports. The m/m rise in oil and gas exports was driven by an average price  increase of c.12% m/m on Nigeria’s benchmark crude blend, the Bonny light, following supply disruptions to crude oil arising from tensions between Russia-Ukraine. 

In contrast, the  value of non-oil exports declined by c.2% m/m to USD570m from USD580m in January. 

Overall, we observe some improvements in non-oil exports despite the m/m fall. Another data series by the CBN drawn from its quarterly statistical bulleting (QSB) shows that the value of non-oil exports, averaged  c.USD683m in the six months leading to February ’22, up from USD405m for the prior six months (to August ’21). 

In February of this year, the CBN began the RT 200 initiative in an effort to boost non-oil export revenues. 

Although the program's goal is lofty, as it aims to generate USD200bn in foreign exchange earnings from non-oil exports over the next three to five years, it appears some progress is gradually being made. The CBN governor recently said that non-oil export revenues increased to almost USD2.9bn in Q1 ‘22. 

Separately, the CBN’s data series from its QSB shows that the value of non-oil exports grew 85% y/y to c.USD1.9bn in Q1 ’22. 

The monthly report lists the industrial, manufacturing, and food product sectors as the top three in terms of import value, accounting for 45%, 27%, and 15% of the overall import value, respectively. 

Although the CBN's initiatives to encourage non-oil export activities are commendable, the government must do more to enhance domestic conditions required to support non-oil export production. 

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